but, you know, i guess that's the way the old quarter gets flipped. >> reporter: miller is the winner. but he isn't thrilled. he says this process is like gambling. >> this is such a departure from anything even approaching a democratic process that i'm simply not willing to do it -- >> jacob long, our affiliate wmbd, a coin toss. now, "the situation room" with wolf blitzer starts now. wolf. brooke, thanks very much. happening now, susan rice goes to capitol hill, but doesn't quiet republicans concerns she and the obama administration misled the american public about the deadly attack on americans in libya. the election was only three weeks ago, but president obama's about to shift back into campaign mode. and we're learning exclusive new details about the personal and professional life of the woman at the center of the scandal that forced the resignation of cia director david petraeus. i'm wolf blitzer. you're in "the situation room."

we begin with the obama administration's latest attempt to explain the misleading information given out in the days after the september 11th attack on the u.s. consulate in benghazi, libya. four americans including the u.s. ambassador to libya died in what we now know was a terrorist attack. but that isn't what the u.s. ambassador to the united nations susan rice said when she went on national television five days after the attack. today rice is up on capitol hill. she's explaining what happened and some big-name republicans clearly are not very happy with her answers. our senior congressional correspondent dana bash is following what's become a pretty long day -- a tiring day for the u.s. ambassador to the u.n. what's the latest, dana? >> reporter: wolf, the three republican senators who had

vowed to block susan rice from being secretary of state if the president nominates her had really softened the rhetoric in recent days. i'm told the reason for that was because it was a curtesy in order for them to wait until they had a face-to-face meeting with her which was today. after that meeting their criticism was harsher than ever. the way these grim-faced gop senators tell it, susan rice's attempt to calm their criticism backfired. >> we are significantly troubled by many of the answers that we got and some that we didn't get. >> i'm more disturbed now than i was before. >> reporter: rice requested to meet with her chief republican critics in order to explain why five days after the september benghazi attack that killed four americans she went on sunday talk shows suggesting it was sparked by a spontaneous protest. >> the information given to the american people was wrong. in fact, ambassador rice said today absolutely it was wrong. >> reporter: accompanied by acting cia director michael

morell, rice explained she was using these unclassified talking points which were stripped of references to al qaeda still classified by the intelligence community. so rice used the word extremist. >> extremist elements came to the consulate as this was unfolding. >> reporter: a source inside the meeting tells cnn rice admitted to gop senators she was aware of classified information suggesting al qaeda was behind the attack. and yet gop senators point out she still said this publicly. >> we have decimated al qaeda. >> reporter: cnn has also told rice tried to clarify to gop senators that what she meant was al qaeda's core leadership had been decimated. but gop senators argue rice was putting pre-election spin before national security. >> it was unjustified to give the scenario as presented by ambassador rice and president obama three weeks before an

election. >> reporter: rice did not answer our questions. she did release a statement admitting her talking points "were incorrect in a key respect. there was no protest or demonstration in benghazi. while we certainly wish we had perfect information just days after the terrorist attack, as is often the case, the intelligence assessment has evolved. we stress that neither i nor anyone else in the administration intended to mislead the american people at any stage in this process." and the white house had this to say. >> the focus on some might say obsession on comments made on sunday shows seems to me and to many to be misplaced. >> reporter: gop senators also complained rice neglected to ask key questions before telling the public what turned out to be wrong information. >> that's troubling to me as well why she wouldn't have asked i'm the person that doesn't know anything about this i'm going on

every single show. >> reporter: now, rice's democratic supporters argue the republican senators are the ones who are politicizing the benghazi attack by continuing to go after susan rice. in fact, homeland security chairman joe lieberman also met with susan rice this afternoon, wolf. and he came out and told reporters he's satisfied with her answers. he sees nothing to disqualify her as secretary of state if the president decides to nominate for her. unfortunately for susan rice, as you know, joe lieberman won't get a vote. >> he won't be in the lame duck senate still a big if if the president goes ahead with his nomination. do we have a clear answer yet why the white house decided to put ambassador rice out on that specific sunday five days after that september 11th attack on the consulate in benghazi -- why did they select her to make the administration's case? >> reporter: do we have a clear answer? no. but we have some suggestions from democratic sources i've been talking to. and the biggest i'm told

actually came up in the meeting today with republican senators which is why wasn't hillary clinton who of course is secretary of state now why wasn't she out there. the answer was that she wasn't feeling well. she was very upset about the fact that one of her ambassadors was killed in the line of duty. and that's the main reason why she didn't go out and that susan rice was kind of the most logical choice to do that. the other argument that i'm told by democratic sources is that she wasn't just talking about benghazi, but she was also talking about the protests that really were happening across the middle east because of that video in cairo and elsewhere. >> usually they do put the u.s. ambassador to the u.n. out before the big general assembly meetings which were about to begin. >> reporter: great point. >> that's probably one of the reasons they selected her as well. that's at least what i've been told by insiders. dana, thanks very much. we're now only 35 days away from the so-called fiscal cliff. deep cuts in federal spending coupled with sharp tax increases by law they take effect automatically and many experts

fear will throw the u.s. economy back into a recession. both congress and the white house are trying to make a deficit reduction deal to avoid the financial chaos. and president obama's reverting to some campaign mode right now to try to make sure things are done his way. our white house correspondent dan lothian is joining us now with new information. what are you learning, dan? >> reporter: well, wolf, while senior members of the administration including secretary geithner, chief of staff jack lou also top advisor meeting with -- the president himself trying to sell his vision to the public, but some say it's not a winning strategy. it doesn't take a gps to find the way to the fiscal cliff. much more difficult, finding the off ramp. at the president's first meeting with congressional leaders more than a week ago, there was a sense of optimism. >> my hope is is that this is going to be the beginning of a fruitful process. >> reporter: there was a follow-up phone call with house

speaker john boehner, but a much different approach this week. the president's calendar is packed with sales pitches to the public, which he hopes will strengthen his hand in negotiations with republicans. on monday a white house report on the impact of middle class tax cuts on the economy. tuesday, a meeting with small business owners. wednesday, meetings with middle class americans and ceos from some of the country's biggest companies. and friday, a road trip to a pennsylvania manufacturing plant. this approach did not escape the attention of senate minority leader mitch mcconnell who questioned the president's leadership on these fiscal challenges. >> in other words instead of sitting down with lawmakers of both parties and working out an agreement, he's back on the campaign trail presumably with the same old talking points that we're all quite familiar with. >> reporter: but white house spokesman jay carney insisted the president is fully engaged in getting an agreement while taking his case to the public. >> so to suggest that we should now that the election's over stop talking to them about these

vital issues i think is bad advice. >> reporter: but that didn't stop a barrage of questions about when the president would next meet with congressional leaders or why he was spending much more time with stake holders than lawmakers. carney hit back. >> it does not -- i think, you know, make a lot of sense to simply say never mind, the american people and business leaders and small business leaders and civic leaders and labor -- you know, cut them out of the process and stop the conversation with them. the president thinks that's a big mistake. >> reporter: so, again, tomorrow here again at the white house the president will meet with middle class americans. these are people the white house said who answered an e-mail, talked about how if those middle class tax cuts are not extended how it would impact them. white house spokesman jay carney saying that it is not a comprehensive solution but "a significant step toward a solution in order to avoid the fiscal cliff." wolf. >> that campaign mode worked for the president in getting himself re-elected. maybe it will work for him right

now in this crisis. dan, thanks very much. let's dig a little bit deeper with our chief political analyst gloria borger. gloria, for some reason this sounds very familiar. the summer of 2011, the debt ceiling debate that was going on. >> yeah. >> but the white house has a little different strategy this time. >> well, first of all, the white house i think is in a very different political position than it was in the summer of 2011. that was when the tea party was on the ascend, the republicans em boldened in the house of representatives. and the president found himself in that deal if you'll recall negotiating with himself and some democrats thought that was just a little bit too early. now, the president has been re-elected. while i would argue, nobody has a mandate other than to fix things on this fiscal cliff, the president feels that he has a mandate particularly from the base of the democratic party. those were a lot of the people he's been meeting with including the ceos, taking the show on the road, taking a page i would argue from ronld reagan's book

going over the heads of the congress to the american people, which by the way republicans will do as well. and this is all part of the theatrics that goes along with finally settling down and getting to the serious negotiations. >> probably a good strategy. look at this, our new poll this week, the cnn/orc poll, asked how to resolve this budget problem. >> right. >> only spending cuts 29%, but a mix of spending cuts and tax increases, 67%. that's an overwhelming majority. so how did the republicans need to finesse their message given where the american public stands? >> i think we see that playing out in public right now. what we have is a republican party that's kind of searching for this new message. and what they have to demonstrate is, yes, they're the party of fiscal conservatism, but they also have to show, wolf, that they can be a little bit flexible when it comes to the details. because they do want to solve the deficit crisis, which is why you see a lot of these people coming out talking about a

balanced approach. which after all is what the president is talking about. some of them renouncing grover nor kwis's no tax increase pledge. it is a party struggling right now to find its way but also trying to consolidate and say we're still the fiscally conservative republican party that we always were and toent like raising taxes. >> how much from leaders on both sides is simply theatrics? >> a lot of it. right now we're seeing the president taking his show on the road. the republicans will take their show on the road. the president's meeting with ceos, the republicans will meet with ceos. the president meting with small business, the republicans will meet with small business. "republican voters know that elections have consequences and that mitt romney's defeat means there will be policy defeats too, but they will give the house and senate gop credit if it fights for its principles and drives a hard bargain."

so, standing up for your principles is what this is about. letting your team know you're still leading the team. this is about positioning yourself to get the best deal you can get for your constituents. but today for example dick durbin, the number two leader of the democrats in the senate came out and gave a policy speech. he has a lot of credibility on deficit reduction. while he said medicare and medicaid changes in those programs should not be part of the first step, the democrats have to look at that down the road in order to be constructive on deficit reduction. this is a senator, liberal democrat, part of the gang of six, somebody with a lot of credibility on deficit issues. i think that opens the door a little bit. you're seeing it on the democratic side. you're seeing it a little bit on the republican side. >> both sides are going to have to open the door more than just a little bit. they're going to have to make a deal. >> because the one mandate from the public was fix things.

>> fix it. and do it quick. gloria, thank you. cnn's getting exclusive new information and photographs of paula broadwell, her affair with jen david petraeus forced him to leave the cia. now her friends are coming to her defense. and a 7-year-old cancer patient tries a controversial treatment. medical marijuana. our dr. sanjay gupta will report. [ male announcer ] when was the last time something made your jaw drop? campbell's has 24 new soups that will make it drop over, and over again. ♪ from jammin' jerk chicken, to creamy gouda bisque. see what's new from campbell's. it's amazing what soup can do.

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cnn is learning exclusive new details about the woman at the center of the scandal that cost the cia director david petraeus's job. friends of paula broadwell are coming forward to paint a more sympathic picture of her both as a professional and as a human being. our intelligence correspondent suzanne kelly is here in "the

situation room." what are you seeing? >> we're seeing these images first in "the situation room." it's from broadwell's private collection. it's an effort to put out what they call a more realistic picture of who she is after two weeks of being cast as something of an obsessed mistress. broadwell has been laying low since news of her affair with former cia director david petraeus. her brother has been the most vocal of her support. not of her behavior but her as a person. another op-ed over the weekend in the "baltimore sun" also not defending her behavior but letting people know some of the betrayals of her just don't match up with the woman who he calls a friend. broadwell's brother also told us earlier today that it's been hard for her family to see the picture that's being painted of her and that her real focus is her family, her husband and her boys and trying to restore the trust that she had with her husband and trying to protect her children from the

publicity." now, we haven't heard much from her publicly, wolf. but those close to her have described her as being absolutely ashamed, embarrassed and trying to recover from this. >> she hasn't spoken publicly about all of this. why the public push by her friends? >> her friends say she's very much concerned about the ongoing fbi investigation into what classified materials she had, how she treated them and where they came from. that investigation is ongoing. and a source close to her says the fbi hasn't given her any indication as to how long it might continue. but as long as there's a possibility of legal action, she's being careful. now, that said, her brother also says that her mind is very much focused on fixing the damage within her family. and that will come before trying to fix any damage to either her career or her reputation. >> the pictures we're now getting, the pictures you're showing our viewers, they're different than the ones we saw before. >> they are very different. this gives you a great indication of what people are trying to do with the portrayal of her. they want to put out the message

she wasn't just a mistress. she was also a professional, a mother, earlier today, petraeus will likely be able to bounce back from this because people who knew who he was before the affair broke, it will likely be far tougher for broadwell because most people are just getting to know her because of this affair. and we have a full story on this, wolf, along with all of these photos on cnn.com/secur y cnn.com/securityclearance. i know you love to read. >> she's getting advice in terms of damage control and how to deal with this. >> yes. both an attorney and p.r. firm trying to give her time to get through this. it's been difficult for her they say before putting her out in any public capacity. again, there's that legal issue hanging over her head. that's a big concern for them as well. >> certainly should be. thanks very much, suzanne kelly, good report. while the scandal undoubtedly hurt david petraeus's reputation, cnn polling finds most people still like him. 44% of favorable, 28% say

unfavorable and another 28% are unsure. our poll also finds an even split 48% to 48% on whether general petraeus should have resigned as the cia director. in egypt today one man is dead after violent clashes with police. protesters are camping out in cairo's tahrir square. in a scene strikingly similar to what we saw in the revolution almost two years ago, the demonstrators are voicing their anger with president mohamed morsi after what some are calling an unprecedented power grab. cnn's reza sayah is joining us from cairo once again. reza, we're hearing about attacks against several muslim brotherhood offices in egypt. what do you know about that? >> reporter: according to the brotherhood spokesperson, two of their offices were attacked by anti-morsi protesters. the brotherhood says the protesters were carrying molotov

cocktails, clubs and knives and destroyed and heavily damaged these offices. remember, muslim brotherhood had called for a one-million-man demonstration of their own today to rival the opposition's demonstrations. late last night they called it off to avoid violence. but in these two particular cities north of cairo, they didn't avoid violence. >> reza, we're also seeing and i want to show our viewers some live pictures from tahrir square in cairo not far from where you are right now. you were there earlier in the day. who are these protesters? and there are huge numbers there. we see the tents. what's going on? >> reporter: yeah. these are the opposition factions. now, what's interesting is right after the 2011 uprising, these factions were all divided. now they've all banded together. these are all muslims like much of egypt, but you're not going to find many hardline islamists here. these are the people who represent the secularist, the moderates, the western style liberals, the women's rights

groups. and they've banded here together to rise up in opposition against mr. morsi. many of them want mr. morsi to step aside. others want him to reverse his decree. but the reason we have a standoff is that mr. morsi, the president, has given no indication that he's going to back down from these decrees, wolf. >> reza sayah in cairo watching this story. very tense situation over there at tahrir square right now. elsewhere in the middle east today they exhumed the body of the palestinian leader i can't say er arafat, they're trying to clear up a mystery. did somebody try to kill him with poison? i always wait until the last minute.

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the latest on what really

killed yasser arafat. what is the latest, lisa? >> wolf, the fompler leader's body was exhumed and reburied a short time later. international investigators took examples to test for poison. they're looking for a toxic radioactive element called polonium. they believe israel is behind any poisoning of arafat. the spokesman for benjamin netanyahu tells our own wolf blitzer that they had nothing to do with arafat's death. he died in 2004 after having a brain hemorrge and slip sboog a coma. and the justice department started talks on the fast and furious lawsuit. republicans want to force attorney general eric holder to turn over certain documents tied to the gun trafficking operation. the obama administration has withheld these documents under executive privilege. holder tells cnn "i think there's a deal that can be struck." and we will bring you more on this very important story in the next hour of "the situation

room." and the u.s. navy wants to replace the aging fleet of marine one helicopters. reuter reports the navy plans to buy 25 new helicopters used to transport the president. that's according to a draft request for the proposal. the first of the new helicopters would be ready in 2020. you might recall in 2009 the navy failed at its attempt to buy new marine one helicopters when a program run by lockheed martin went way over budget. and this year cyber monday being called the biggest online shopping day ever. according to ibm's smarter commerce online sales were up 30% over last year. it's estimated cyber monday sales topped $1.5 billion. also a growing number of shoppers there used mobile devices like smartphones or tablets to make their purchases. i think it's just becoming easier. and that's the way -- >> did you buy anything on cyber monday? >> i bought a couple of things. but i also bought some things on black friday too. >> you did the old fashioned way and new way.

>> exactly. but you got to admit it's easy with a few clicks of a button here and there and presto. >> a lot of times there's free shipping. >> especially on cyber monday. that was the real thing. if you looked around, had your favorite stores, you could find some deals. >> retail stores going to wind up like newspapers? >> i think people still like going into the store and trying it on particularly when it comes to things like clothes and shoes. >> it's not like you have to look for a parking spot, wait in line, spend hours over there. it takes up time. >> a lot of people like that. they like the black friday experience of going to the mall and seeing the christmas decorations. >> it's good for the economy. >> that's right. >> lisa, thank you. mexico's getting ready to swear in a new president. enrique pena nieto, i had a chance to sit down with him and ask him about the war on drugs, immigration and a whole lot more. my exclusive interview with the brands new mexican president is coming up. also, today's strategy session takes a closer look at whether

today's trip to capitol hill helped or hurt susan rice's chances of becoming the next secretary of state. two years ago, the people of bp made a commitment to the gulf.

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sale ends midnight november 27th. all right. let's get right to our strategy session. joining us right now democratic strategist james carville and republican strategist mary matalin. they're both cnn contributors. thanks very much for coming in. as you know the u.s. ambassador to the u.n. susan rice met with her top republican critics on capitol hill today. listen to what senators said after the meeting. >> we are significantly troubled by many of the answers that we

got and some that we didn't get. >> i want to say that i'm more troubled today knowing having met with the acting director of the cia and ambassador rice. >> bottom line i'm more disturbed now. >> more disturbed now. more troubled now. mary, are they giving the u.s. ambassador a fair shot? there's all the indications we're getting the president maybe wants to name her the next secretary of state. >> well, whether she was misleading purposefully or unwittingly, we come to the same end. there's never been an incompetence of that magnitude at that level. there was open source intelligence. i don't know anybody, neither do you, wolf, in all the administrations i've worked in or you've covered where you get talking points handed to you and you don't ask questions. even the presidential daily brief, the pdb, is intended to be asked about. not to be read, to be read deeply into and asked questions. i can't imagine any u.n.

ambassador, any secretary of state just taking prima facie, that kind of information that was belied in realtime by libyans on the ground, by our own people on the ground, by a realtime drone aerial picture of it would go out a week later and say that. if she's not misleading, then she's incompetent. >> what about that, james? >> well, we got that report by ambassador -- going to come out in january. if the president does appoint her, which frankly now i hope he does, she'll be asked openly and she will testify and the public will see the whole thing. they've already launched an investigation director of central intelligence to testify, the director of overall intelligence to testify. so they'll have a chance to question ambassador rice presumably going to be secretary of state nominee rice and she

can give her answers. that's the way the system should work. and they'll have the benefit of the report audited by the administration. i'm sure the secretary of state will be testifying at some point in this too. or be heard from. so we'll see where it goes. i'll agree with tom ricks who was on our competitor network, fox news, said he thought the whole thing was overblown. obviously they're going to find some mistakes were made. in anything they do i think the public has a good grip on this. we'll see if secretary of state does she testifies and they have a chance to question her. >> mary, do you think there's anything she can do to win over the skeptical republicans? >> i honestly do not believe this is about susan rice. i believe she's a smart person. she's a rogue scholar and understand all of that. but there's either a horrific intelligence breakdown, something broke down where this administration through the mbi chairman says he took out the

real facts about what was going on on the ground. there's something wrong when this administration allows their u.n. ambassador whose read-in at that level to go out and mislead the american people on a terrorist attack. it's not about susan rice. she's a distraction here. but what those senators are talking about is we live in a dangerous world. and we have to have a better answer than talking points given to her like she's some kind of flak. >> these polls that we have, james, these latest cnn/orc polls, how has the obama administration handled the benghazi attack, 40% say they're satisfied, 54% dissatisfied. did the obama administration try to intentionally mislead the public on the benghazi attack? 40% say yes, 54% say no. the administration's got some work to do, james. >> they have made some mistakes here. again, we have the report coming

out that they audit by ambassador pickering who is probably one of the most respected people in the last 30 years in the state department. they've testified we're going to know in january what happened. are we going to find out somebody made some mistakes? i'd be shocked if we didn't. i mean, again, this whole thing is probably some mistakes made here i think the entire thing is -- i think the public has a pretty good grip on it. that they've made some mistakes and they weren't intentionally misleading people. but we're going to have real answers. and by the way, if secretary rice -- i mean ambassador rice is appointed to be secretary of state, they can get more answers. they have subpoena power in the house. they can do all of these things. and there's been no evidence of any cover-up or anything. we'll get all the facts and the public will be able to discern what it is. go back to what tom rick says that he thinks this whole thing is overblown. of course people have made mistakes. we'll find out what they are and assess and go on from there. >> we'll go ahead and see if the president nominates her to

succeed hillary clinton. and then we'll watch the fight up on capitol hill. thanks very much. hundreds of thousands of homes torn apart by superstorm sandy. as people start to rebuild, are insurance companies trying to help? or are they just trying to help themselves?

the price tag for superstorm sandy is growing. officials in new york state and new jersey say they'll need more than $70 billion to recover. in some ways the property devastation was worse than hurricanes katrina and rita combined. in some ways. in new york state alone sandy destroyed more than 300,000 homes. that's a lot of homes that have to be rebuilt.

and as cnn's national correspondent deborah feyerick discovered, it means a lot of homeowners are looking for answers. >> reporter: when superstorm sandy hit, peggy thought she was ready. she paid decades worth of insurance premiums to be covered for catastrophe. so this is the letter basically denying -- >> i went to the office and this is what they gave me. >> reporter: she says her claim was denied. her deluxe homeowners policy covered hurricane and wind, not floods. >> she said you're not entitled to anything. you don't have flood insurance. >> reporter: down the block, tom sullivan was having a similar problem with a different insurance company. >> the water was coming out of the tubs, out of the toilet. >> reporter: after initially being told he would get $10,000 for sewer backup, he was then told no because his damage was caused by the storm surge. when you agreed to this policy, was it your understanding that if i pay you and my home suffers

damages, you will make it right and cover? >> that would be the understanding with anyone. i mean, otherwise why pay? >> reporter: more than a dozen people -- insurance critics call the pushback delay deny defend. >> the worst is just saying we're not going to pay for this when in fact it's covered or lowballing saying we're only going to give you 50 cents on the dollar. >> reporter: what we're hearing is is that a number of these insurance companies are finding ways to say no before they're finding ways to say yes. >> i would disagree. there are a small number of disputes that do occur. and when you have as many as a million claims, yes, they do. >> reporter: robert speaks for the insurance industry. he cannot talk about the denied claims. instead saying payment of

sandy-related claims is going very well. >> people are paid the amount of money that they are entitled to under the terms and conditions of the policy, yes. >> reporter: and that may be a big part of the problem. many people don't understand the terms and conditions of their policies until after they need them. what does this mean? we may not limit our liability to pay damages for which we've become legally liable to pay? >> i don't know. >> reporter: some people will say, look, it's your responsibility to understand this? >> but what does that mean? >> reporter: arguably, some insurance companies may count on exactly that. the state's chief insurance regulator is tracking insurance companies who fail to do the right thing. >> if it ends up that there is a pattern where particular coanies are not paying what they promise to pay, they are going to have a huge problem doing business in this state. >> reporter: so what happened? well, peggy taylor got help from the new york state department of financial services, which called taylor's insurance company on her behalf.

an adjuster came, assessed the damage and instead of getting zero, the adjuster cut a check for $7,500. a partial payout for hurricane and wind damage. not e not flood. tom sullivan, we called his insurance skpaen and again promised him a check for $10,000. they then contacted us here at cnn to find out whether sullivan's story would be included now that the matter was resolved. wolf. >> deborah feyerick, thanks very much. diagnosed with cancer and taking medical marijuana. is it a safe treatment for a 7-year-old girl? standby. our dr. sanjay gupta has a report. the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it.

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the movement to legalize

medical marijuana is gaining support. but what if the patient is a child? in july a 7-year-old was diagnosed with leukemia. a few days later she joined oregon's medical marijuana program. her mother says the cannabis oil helped put the cancer in remission. but is it safe? we asked cnn's chief medical correspondent dr. sanjay gupta. sanjay? >> well, wolf, the question of safety is the first one that comes up every time you talk about this. and as you might imagine, it is difficult sometimes to get some of those study results back. in the united states for example, it's an illegal drug that we're talking about. so it's hard to do the studies and especially hard to do them in children. so a lot of the data that we talk about actually comes from other countries. so for example there was a study out of the netherlands looking specifically at adolescence who smoked marijuana or who took marijuana and comparing them to people who are adults. and they did find if you smoked or took marijuana before a certain age, it was more likely to have a long-term impact.

so for example these children who started during an average age of 8 but teenagers as well, by the time they were 38 they had a loss of about eight iq points compared to the general population. that's a lot, not much depending on your perspective, with adults they did not find the same long-term impacts in the studies. with regard to this 7-year-old, she has this treatable form of leukemia. about a 79% or 80% chance of putting this in remission. she's trying to alleviate some of the symptoms like the nausea associated with chemotherapy and also the pain. marijuana can be especially effective for treating what is known as neuropathic pain, the pins and needles sort of feeling. the question that doctors want to know is if it's safe, effective and more effective than what else is out there? are there other medications for nausea, zofran and thc which is the active ingredient in marijuana that's something

that's fda approved. again, a decision between patient and their doctors. macayla isn't the only one. in the state of oregon alone, of the 2,200 people on the registry, 52 are children. now legalized for medicinal purposes in 18 states and two more purposes. this is an issue going to come up again and again. wolf, hopefully we'll get a chance to talk about it. >> i'm sure we will. sanjay, thanks very much. let's hope the little 7-year-old is going to be okay. thank you. a deadly day of eight car bombings in iraq. lisa ssylvester's back. agtd on one day in iraq. what is going on? >> that's something else. 129 people skilled and 126 wounded in a string of car bombings around iraq today. bombs attacked in baghdad. no claim of responsibility for the three baghdad attacks yet, but police are pointing the finger at al qaeda in iraq. the deadly attacks come a day after officials agree to talk about disputed areas including

in ku cook. and the aclu suing over women in combat. the civil liberties group says the policy is unconstitutional. it's filed on behalf of four women who served in iraq or afghanist afghanistan. the defense department recently allowed women to serve in some combat units. strongly committed to examining the expansion of roles in the u.s. military. and look at this amazing video from hawaii. lava on a volcano in hawaii is reaching the ocean. the volcano has been continuously erupting for almost 30 years. it's the first time the lava has flown into the ocean in almost a year. experts say it's very dangerous and they are warning people to stay away. boy, does it make for a beautiful sight. beautiful pictures. and i've actually -- well, you know i went to high school on the big island. i've seen that pictures time and time again. i've actually been relatively close. you really can't get too close.

but it is really a sight to see, wolf. >> thanks very much, lisa. mexico's new leader's here in washington to meet with president obama. but first he sat down with me for an exclusive interview today. you're going to hear his strong words over the so-called fast and furious gun smuggling operation. and the powerball jackpot reaches half a billion dollars. [ male announcer ] this single scoop of gain gives more freshness

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call... and lock in your rate for 12 months today. liberty mutual insurance. responsibility. what's your policy? the jackpot for tomorrow's powerball drawing get this is now a record $500 million. but it may come with a catch. lisa's back. she's got more. lisa. >> hi there, wolf. so who doesn't want to win the lottery, right? in fact, i bought my lottery ticket already. but you know, wolf, believe it

or not there are some former lottery winners who say they wish they had never won. winning the lottery will change your life often for the good, but sometimes for the bad. this is the stuff of dreams. >> i'd probably buy my wife a new car. >> i'd be able to pay off my student loan. >> retire most definitely. >> reporter: $500 million before taxes, that's how much you can win in the powerball jackpot. if you win, you can buy a lot of stuff. but what about happiness? well, it turns out those cliches money can't buy you happiness, money doesn't make the man, a fool and his money are easily parted, there's some truth to them. only about half of all lottery winners are happier three years later says michael boone whose seattle firm advises big lotto winners. >> i think henry ford said it really well. money doesn't change a person, it simply unmasks them. i think that really is what happens. so people have an opportunity to do all the things they dreamed of.

and sometimes those are good things and sometimes they're not. >> reporter: christmas 2002, jack whitaker of west virginia had the only winning ticket in the $4 million jackpot. two years later his wife said she wishes she had torn up the ticket. their lives in shambles. their 17-year-old granddaughter was dead after struggling with a drug addiction. whitaker faced multiple lawsuits and was arrested twice for drunken driving. abraham shakespeare in florida was murdered after winning $31 million. then amanda clayton, a young mother who won $1 million in the michigan lottery. she made headlines when she copted to watch food stamps. she was found dead of an apparent drug overdose. are they unlucky or is there something more? big payouts can isolate people. thrust them into a world of wealth that is foreign to them. long lost family members may hound them. there's a guilt factor, who to help out and who not to. and there's a funny thing about money and happiness you may not

realize. >> you win the lottery. and so you spend a lot of money. and what happens is you get used to having a lot of money and spending a lot of money. so what happens is you actually have to spend more money to get the same level of happiness. >> reporter: but what about the lottery winners who do end up happy? what's their secret? experts say they don't lose their sense of self. and they can separate their identity from their money. and what makes people really happy is actually the pursuit of happiness, enjoying the journey of setting a goal and reaching it. with the lottery the money is just handed to you. also tart says making someone else happy and having a sense of purpose and also expressing gratitude, those are the true keys to happiness, wolf. >> good points. lisa, thank you. and you're in "the situation room." happening now, satellite images sparking new concerns that north korea may be getting ready to launch a long-range missile. horrifying details emerging of a

shocking new death tied to mexico's drug wars. can a new leader end the violence in mexico? i'll speak exclusively with mexico's president-elect. he's here in washington. and they suffered without power for weeks after the superstorm sandy hit. but now some storm victims are getting hit again with huge power bills. we want to welcome our viewers in the united states and around the world. i'm wolf blitzer. you're in "the situation room." we begin with one of the most dangerous spots on earth. u.s. intelligence now keeping a very close eye on a north korean site where a flurry of activity suggests a long-range missile launch could be in the works. and that would be a blatant violation of u.n. resolutions. let's go live to our pentagon

correspondent barbara starr. barbara, what are you learning? >> well, wolf, north korea says it is pursuing trying to launch a satellite into space. but intelligence services around the world doubt that that is true. this satellite image of a north korean missile launch pad was just snapped in the last 24 hours. u.s. government officials and private experts say it shows the same types of preparations including trucks and fuel tanks not seen since april when a long-range missile failed seconds after launch. north korea claimed then it was just trying to launch a satellite. the new digital globe image and this one taken just days before don't yet show a missile. but with these kinds of preps, a launch could happen in about three weeks if a missile is put on the launch pad according to analysis by digital globe. north korea watchers say the new leader, kim jong-un may be

responding to internal political pressure from hardliners. >> on the other hand, he may also want it himself. he may decide it's the right kind of provocation just before the south korean president elections, just before president obama is inaugurated for the second time. >> reporter: the launch location is critical. from here missiles are planned to launch south, avoiding flying over japan and south korea. because it's close to the chinese border, the u.s. can't routinely spy with manned aircraft or ships from a distance. north korea knows the u.s. has to wait to send satellites overhead. so they do some work out of view. the pentagon says u.s. policy remains that north korea must abide by restrictions imposed by the united nations security council. >> these resolutions among other things require the north korean government to suspend all activities related to its ballistic missile program. >> reporter: there's been other key activity here. the website 38north recently

published a satellite image from september showing north korea testing large rocket engines. there is burned vegetation, fuel tanks and trucks which all point to critical activity. now, wolf, you remember back in april the north koreans tried one of these long-range intercontinental ballistic missile launches. that test was pretty much a disaster. the missile failed after about 90 seconds off the launch pad. so one of the questions analysts are asking themselves right now is will north korea rush it again and possibly fail? or are they going to take the time this time to solve whatever engineering problems they have and could the next test really work? wolf. >> what you're hearing, barbara, the u.s. analysts when they're looking at the various clues out there, does it look like a similar launch that took place earlier in the year which was a disaster for north korea? or does it have different markings? >> well, the preparations do look the same officials tell us.

the same kinds of fuel tanks, trucks, people, activity, instrumentation out there that u.s. satellites are picking up. but the key question is, why are they not yet seeing a missile on the launch pad? that of course would be the ultimate sign that north korea's planning something, wolf. >> we'll keep a close eye on it together with you, barbara. thank you. the civil war in syrian seems to be reaching new depths of horror every single day. cnn has been digging into a report by opposition activists that at least ten children were killed when a syrian aircraft dropped a cluster bomb, that's a devastating fragmentation explosi explosive, on a playground. nic paton walsh is joining us now from beirut. it looks like it's going from bad to worse, the brutality in this war unfolding in syria. what's the latest? >> reporter: absolutely. what you're referring to, wolf, is this cluster bomb to the east of damascus which now human

rights watch having studied activist video heard from activists on the ground pretty certain cluster bombs were used. they say it looks like soviet -- they say witnesses say there was no specific rebel target in the area around there which they could have been aiming at. and of course applying pressure for the world to stop using cluster munitions specifically here of course for the syrian regime to stop hitting civilian targets, wolf. >> and the brutality is really unbelievable. about 40,000 people so far have been killed in this war over the past year and a half. who knows how many have been injured or made homeless, refugees streaming into syria, jordan, other countries in the region. is there any positive signs whatsoever that this may be coming to an end any time soon? >> reporter: well, of course there's two different sides to that. the fear with the cluster bombs as the regime get put on their back foot, they may resort to

some of the more devastating weapons in their arsenal. cluster bombs among them but also chemical weapons. the u.s. is very concerned about what will happen to them in the event the syrian regime collapses. i say that, we are seeing perhaps the rebels a glimmer of hope of some description. over the past week daily we hear of air bases, military outposts being overrunned, surrounded. in the east of the country, in the north, to the east of damascus, the capital itself two in the last week. and rebels reporting a military base was overrun 70 regime soldiers they say killed or captured and they're also moving in on the west of that city, aleppo, another air base from which you saw dramatic video of rebels downing a regime helicopter. so the sense of progress really, these constant bases being overrun, a stream of positive news from rebel movement accused of locked in stalemate for a long time now. i think feeling from many observers momentum is on their side and able to prevent the

regime from projecting its brute force, air power and artillery in much of the north and east of the country. i'm sure in damascus around president bashar al assad many questioning what their next step should be, wolf. >> nick paton walsh, thanks very much. just ahead, the dust has barely settled from the president election. but are rick santorum, jeb bush among others already planning for 2016? and scandal bankrupts a california city. officials allegedly scam millions and millions of dollars from taxpayers. one former police chief now wants a lot more. ... what should we invest in? maybe new buildings? what about updated equipment? they can help, but recent research shows... ... nothing transforms schools like investing in advanced teacher education. let's build a strong foundation. let's invest in our teachers

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[ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. [ yawning sound ] president election is barely over, but new reports of secret meetings, interviews already fueling the 2016 buzz. here's what former republican presidential candidate rick santorum told our piers morgan last night.

>> they said would you consider and i said i'm open to that possibility. but we're a long way out. >> long way off. i guess maybe not so much. let's talk about it with our cnn contributor ryan lizza, washington correspondent for "the new yorker" magazine. santorum not ruling it out, gingrich not ruling it out. talk jeb bush had a quiet meeting with one of the top republican pollsters. what's going on here? >> there's nothing wrong with not ruling it out. there's no reason a guy like santorum or gingrich wouldn't. get media attention, keep their name in the news and always better to be talked about than not to be talked about. santorum has some right to think about 2016 after all he was the runner-up, he was the last man standing against mitt romney in 2012. the guy that's the most interesting is bush though. >> jeb bush, the former florida governor. >> the former florida governor who had been thinking about running for the president for years. in the wake of 2012 and the lessons that the republican party are learning right now, he's the guy with the message that could both keep the

conservatives in his camp and crossover with some moderate. >> he was pretty popular in florida. he speaks spanish. he could deal with a lot of sensitive issues like immigration reform in a relatively different way than other republicans. >> yeah. he's the guy to watch. he has a book coming out about immigration reform in the spring. clearly he's been writing this book through 2012 knowing it was going to come out in 2013 after the election. he's clearly setting himself up to make that decision to run. look, in florida he did better with hispanics than marco rubio, the cuban-american senator from florida. he won more hispanics when he was -- >> he's fluent in spanish too. >> his wife is from mexico. and obviously the big story we focus on these days is how poorly they've done with hispanics in the last couple elections. he's someone to watch. the other thing that's going to shape 2016 obviously it's very early, the 2014 midterms will shape the field. the presidential election is always shaped by the previous election before it. >> i don't know about you, but i could see a clinton-bush contest in 2016.

>> it could happen. just by name id alone if you probably polled democrats and republicans, i imagine hillary and jeb would be the favorites because of the power of their last names. >> i could see that happening. james carville told "rolling stone" magazine, "there's a reason that jeb bush or chris chris tee or mitch daniels didn't run. they just couldn't do it. they knew what they had to do, and deep down inside they didn't have it in them." in other words, he says they're skeptical about all those anti-global warming types out there, immigration reform. they're in favor of immigration reform. do you think he has a good point? >> i think what shaped the field was when the tea party started to be the driving force in republican politics and some moderates or republicans who consider themselves conservatives had taken positions previously that were no longer considered conservative decided just not to run. i mean, the guys that did, the moderates like jon huntsman, never stood a chance.

i think there's something to that. the other thing happened in 2012 is 2006 and 2008 were big democratic years. and a lot of the top republican talent was washed away in 2006 and 2008. you just didn't have the strong candidates for 2012. that will be different in 2016. a big robust fields with a lot of talent. >> in this fight over the fiscal cliff right now, you think more republicans are going to bolt from the grover nordquist pledge no new taxes? >> that appears to be where it's going. the central between romney and obama was how to adjust tax rates. the republican party lost that debate. in our system politicians usually respond to elections. you're seeing that a little bit. it's tough in the house. most guys elected in the house they won by 60%, 70%, most of the republicans. and so their incentives are a little different. they look at the presidential results and say i don't have to worry about that in my district. it's still very popular to be anti-tax. but that's definitely the way

things are moving. >> not enough to have a few moderate republicans and senate to do it, you need a whole lot in the senate and house. >> boehner doesn't need his whole republican caucus, he probably needs about 100 republicans. >> he can get 100, that would be pretty good from that perspective. thanks very much, ryan lizza. a popular comedy website names the north korean leader kim jong-un the sexiest man alive for 2012. you won't believe what country fell for the spoof. stay with us. you're in "the situation room." while energy development comes with some risk, north america's natural gas producers are committed to safely and responsibly providing generations of cleaner-burning energy for our country, drilling thousands of feet below fresh water sources within self-contained well systems. and, using state-of-the-art monitoring technologies, rigorous practices help ensure our operations are safe and clean for our communities and the environment. we're america's natural gas.

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ireland will clarify its abortion laws in the coming weeks. lisa sylvester's back. she's monitoring that story, some other top stories in "the

situation room." what's the latest? >> the irish government will decide by december whether to allow abortions and in what cases. the abortions have been banned in the mostly catholic country since the 1980s. although the supreme court says they are allowed when a woman's life is at risk, the debate has picked up since a 31-year-old woman died in ireland last month after being refused an abortion. heavy flooding across england is causing major damage with hundreds of flood warnings across the country and more than 1,000 homes already flooded. the rising waters have also shut down train lines and roads. in one town a burst river forced more than 500 people to evacuate. heavy rains have swept across england and wales for days now. the florida socialite at the center of the petraeus scandal is losing her title. south korea is stripping jill kelley of the designation. the title carried no official

responsibility. kelley complained to the fbi after she said she received harassing e-mails from general petraeus' mistress paula broadwell. she hasn't returned any of our calls. and the site named north korean leader kim jong-un, yes, the sexiest man alive for 2012. and a chinese news site, they thought it was real. china's people's daily reprinted the onion's description of "heir of power that masks an unmistakable cute cuddly side and his impeccable fashion sense, chic short hair style ndk that famous smile." also including a photo gallery. they almost could have been describing you, wolf. an heir of power that masks a cute and cuddly side. and of course that wonderful smile as well. they could have been talking about the sexiest man, right.

channing tatum -- >> let's move on. if you've ever dreamed of being a billionaire or millionaire, whatever, you can get there by picking the right numbers for tomorrow's powerball lottery. the $500 million jackpot is the largest powerball in history. but before you and your co-workers pool your money to buy a block of tickets, cnn's alison kosik has some advice for all of you to consider. >> it always seems like a good idea to go into an office lottery pool. it builds camaraderie, gives everyone a chance to share in the wealth. but what happens when your cube mate takes all the money and re'some advice to me sure you get your fair share. first, it may be obvious but write everything down. create a document with who contributed money and how much and have everyone write down their own name or signature. and be sure to clarify if certain people are meant to get a bigger cut if they invested more. legal experts say a simple

document like that will hold up in court. also, before the drawing make sure each person in the group has a photo copy of all the tickets the group is sharing. that way any personal ticket purchases are kept separate from the pool. there have been many lawsuits filed by people involved in office pools who have claimed the eventual winning ticket was one they'd bought on their own. and of course use common sense. it's always better to go into a pool with people you know and trust. then all you have to decide is what do you do with the money if you win. what would be your first big splurge? i'm alison kosik in new york. >> good advice, alison. thank you. the biggest problem between the united states and mexico right now and how to solve it, i'm going to be speaking with mexico's president-elect enrique pena nieto. my exclusive interview with the newly elected president of mexico, that's just ahead. could only come from nature.s new nectresse. the 100% natural no-calorie sweetener made from the goodness of fruit. new nectresse. sweetness naturally.

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pena nieto. he's meeting over at the white house today with president obama. their first meeting, the 46-year-old recently elected, the new president of mexico, he'll head back to mexico city. he'll be inaugurated on saturday. my interview with him before he went over to the white house, i sat down with the newly elected president of mexico. you're going to see the interview here in "the situation room" momentarily. all this comes as tens of thousands of people have died in mexico's drug war. and now shocking details emerging of a new killing that seems to represent the horrifying nature of the conflict. brian todd is looking into this for us. what are you seeing, brian? >> wolf, this was a grizzly case. a clear message from cartel leaders to other local mayors who try to stand up to them and a symbol of this drug war even with some positive signs recently is far from won. surviving two assassination attempts, but she could not escape. dragged away, tortured, stabbed, beaten to death.

the mayor of a small town in the mexican state became the latest high profile casualty in the drug war. her body was found in a ravine over the weekend. for denouncing traffickers, she became more than one of two dozen mayors in mexico assassinated in drug-related violence since 2007. one analyst says she also became a symbol of this struggle. >> this conflict, this violence, it's very gruesome and also mostly felt at the local level. oftentimes in off the beaten path places and municipalities and small towns. >> reporter: it's against that backdrop that mexico's newly elected president enrique pena nieto is in washington to meet with president obama. analysts say pena nieto is likely to veer at least slightly away from the confrontational and controversial tactics in the drug war by his predecessor. deploying the mexican army and marines as never before, he fought the cartels head-on, took

out several kingpins. during his six-year term, the streets flowed with flood. at least 50,000 mexicans were killed, many of them innocent civilians. that's far more than the american death tolls in iraq and afghanistan combined. homicide rates in those areas have recently plateaued. and a mexican official tells us civilians there are telling them they do feel safer now. tourism is bouncing back. analysts say president-elect pena nieto will continue to confront the cartels but in a more nuance way. >> with the united states he's going to ask for more intelligence sharing from the united states. there's been intelligence sharing. it's been in a little more limited way. they would like to see that expanded so that mexican authorities, police, army, marines, have more information and can go after the bad guys with that intelligence. >> reporter: experts say he's also likely to focus on mexico's own addiction problem, which is growing. police efficiency, lack of

prosecutions, overcrowding of jails have to be addressed. and while pena nieto says that the u.s. has to take responsibility for the american demand for illegal drugs, it's just one of the problems north of the border. >> the people run drugs in dozens of u.s. cities. and you have a presence of drug cartels in dozen of u.s. cities. so they're very much integrated in our society. >> rubin says americans and mexicans have to start thinking of the drug war in the same terms that they do the war on terror. it will be fought for a long time, maybe even without end. and when you take out some top leaders, others will certainly replace them, wolf. >> in your conversations, brian, with mexican officials, you're getting other information about how the newly elected mexican president will deal with this drug war? >> that's right. one mexican official told me president-elect pena nieto is likely going to dissolve the ministry of public security or the secretary of public security which the president created a few years ago. he's going to fold that into the interior ministry.

the idea is to better coordinate operations against the cartel leaders and place the federal police inside the interior ministry. they hope that will lead to better coordination, streamline operations and maybe more success. >> it's a huge, huge process. >> absolutely. finding new strategies to tackle mexico's drug violence certainly one of the top items on the agenda of president-elect enrique pena nieto. but that will require continued close cooperation with the united states. mexico's incoming leader paid a visit to the white house today. he's been over there meeting with president obama. but before that he sat down with me here in washington for an exclusive interview. what's the biggest problem in u.s./mexican relations right now? >> translator: to build greater trust in our relationship is first and foremost with mr. obama in this meeting. the main purpose is to get to know each other. i'm convinced a good relationship between the countries has to go through the

people who -- they have a good understanding. and my purpose then is to create a relationship to build a relationship based on trust and relationship that would be positive, constructive that would allow us to understand the world affairs and the world matters that both peoples have to face. and based on this agreement will reach relationship of brotherhood. >> there have been record deportations in the obama administration from the united states of undocumented workers back into mexico. >> translator: i think we have to work on this issue. especially to get to proper treatment for the people who are deported because they'll have the proper papers. but also i see with great understanding the proposal president obama has offered to reach immigration reform.

it's north american politics but which my government sees with great favor. >> why are fewer mexicans seeking to cross over into the united states now? >> translator: because we have lack of opportunity in mexico. right now mexico has a great window of opportunity in my opinion to reach a grower economic growth, social development. there are two main issues of my agenda, of my proposal and want to be focusing on for the next few years economic growth to reach greater social benefits. that i think is going to be the best prevention until my government can establish -- organized crime and avoid millions of -- from my country will have no other option. >> the mexican ambassador here in washington, he said that the mexican government was left in his words in the dark by that so-called fast and furious operation that resulted in the killing of a u.s. border guard.

have you -- will you take steps to make sure that can never happen again? >> translator: to be frank, i told president obama -- i'm going to tell president obama to try to avoid policies which are outside the knowledge of the other government. i think a good relationship that mexico could maintain with the united states and vice versa should be based on trust on opening -- openness and constant dialogue that would allow us essentially to define, share objectives and to work on those so as to avoid activities which are not known to the other government. >> we just learned a well-known mexican mayor, was killed, was murdered. can you give us your reaction to what's going on? >> translator: what my country cannot do is to allow us to be

intimidated, the authorities to be intimidated by organized crime. i think mexican state must and one of my task, one of the changes that i have strategy and security issues that my government must reach, we have greater coordination of efforts at every level of government is task for the state as a whole involves all three powers of the state, involves all the authorities so that events like the one you just mentioned will not happen again in our country. >> what do you think of the legalization effort of marijuana in states like colorado, washington state? is that going to help or hurt? >> translator: personally, i don't agree legalizing drugs -- it's not just about legalizing marijuana. i think that is a door that will eventually cause for sectors of the population -- but what's

clear now is seeing which is happening to the states of the american union the united states could possibly in the near future to refocusing of the strategy. i'm convinced and i'm open to the debate about issue and to define new strategies in order to combat drug trafficking and drug consumption to combat it. and that has to be reached jointfully. >> as you know the state department has issued a travel advisory to go to mexico and a whole bunch of areas of mexico saying it's unsafe for americans to be there. how safe is it for american tourists to come to mexico? >> translator: mexico is a safe country. unfortunately, some areas of our country are living through events of greater criminality. and that is the challenge to the government. but mexico wants to -- splendor and beauty that we have in our

country. for those who have not visited, for those who have the chance to be in mexico, i think their experience has been very different from that which is pointed at unpredicted towards -- we are a country with hospitable people with great natural beauty all over the country. i will work precisely to reach efficiency and to recover spaces which have been lost. >> some in mexico have called you the mexican kennedy. how do you feel about that? >> translator: i will let history make its own judgment. let the mexicans make their own judgment based on the results of whatever i manage to achieve in my administration. really is very honorable for me to hear such praiseful expressions. but most important for my government, for myself, will be to offer tenable results. >> good luck to you. good luck to all the people of

mexico. >> wolf, thank you. the fda shuts down a peanut plant. what this bold first-time move could mean for your next trip to the grocery store.

the fda's taking bold new action against the peanut plant tied to a nationwide salmonella outbreak. cnn's tori dunnen is working the story for us. she's here in "the situation room" with details. what have you learned, tori? >> wolf, this plant was set to reopen later this week, but the fda stepped in and did something it hasn't done before. dozens of people sick in 20 states. peanut butter manufactured at this plant in new mexico and sold at grocery stores

nationwide was linked by health officials to an outbreak of salmonella in september. now, the fda is shutting down sunland incorporated. the government's new power to halt food production was granted in 2011 as part of the food safety modernization act. but this marks the first time it's been put into action. so what does this mean for you the consumer who comes to a grocery store looking for a particular item? does the fda action mean the food you choose will be safer? >> producers and consumers should see this action as a signal that fda is really prioritizing food safety. >> reporter: an attorney and food safety advocate says the government is taking a more assertive stance. >> the new food law allows fda to be more preventive rather than reactive. they're u allowed to shut down plants even before there's an outbreak. >> reporter: sunland voluntarily stopped putting out the peanut

butter. >> we have taken all of the proposed necessary and recommended steps to make certain that we are in complete control of our environment and anything that is coming in and out of the plant. >> reporter: the company says it's disappointed by the fda's decision to stop production. it had plans to reopen this week and start selling again by the end of the year. >> everybody's been so concerned and hoping we get the problem solved and get back to going. and it's so important to the area. it's a major industry for eastern new mexico. >> the fda issued a statement about the suspension of sunland. it says "consumers can be assured that products from this facility will stay off the market until fda determines that the company has implemented procedures necessary to produce safe products." and, wolf, we of course mention this is the first time the fda has completely shut down operations and that law makes all of this possible. >> first time ever. thanks very much, tory, good

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shock and outrage in a california town bankrupted by scandal. a number of city officials allegedly raking in millions at taxpayer expense. at the center of the controversy an ex-police chief who claims he's entitled to hundreds of thousands of dollars more. here's cnn's kyung lah. >> reporter: a 22-year veteran of the bell police force

sergeant james is reminded of the corruption at every turn he takes. boarded up buildings, vacant homes and lots. and store front after store front for lease. but nowhere is a reminder more stark than his own police station where he says his former police chief was there for only one reason, greed. >> he was here for his personal gain. he was not here to better the community. certainly not here to better us. >> reporter: he's talking about former police chief randy adams pulling in a whopping $457,000 a year. for a police force with only 30 officers, way more than top cops in neighboring los angeles, chicago or even new york. cash put in his pocket by a city manager and others who were paying themselves inflated salaries. the city manager taking home more than $1 million. this was the reaction when the public found out. outrage. anger boiled over. prosecutors nabbed eight city leaders saying they used public

funds like a personal piggy bank looting the working class city of millions of dollars. they face criminal corruption charges. chief randy adams wasn't charged because adams didn't directly control the city's money. but even a judge wondered in court, i don't know why he's not a defendant in this case. so where is adams today? he lives in an upper class l.a. suburb 50 miles northwest of bell just off country club drive in a gated community. his $800,000 home overlooks a picturesque golf course. >> disgusting. and the fact that he is living this lavish lifestyle on the backs of us. >> reporter: bell resident calls adams the one who got away. >> arrogant, cocky, criminal. if i can find the dictionary where it says corrupt police chief, whatever his picture would be on it. he's epitome of what is wrong in this country. >> reporter: she says that because of these e-mails from

2009 exchanged between adams and angela, bell's former assistant city administrator. adams negotiating the terms of his new job as bell police chief wrote "i am looking forward to seeing you and taking all of bell's money. okay. just a share of it."lol, well, take your share of the pie, just like us. we will all get fat together. the salary quietly approved by the former city manager. >> my jaw dropped when you see it. >> the new city manager says he still can't believe what happened and what is still happening. talking to me in the run down city council chambers said walking away with the paycheck wasn't enough. the former chair is now suing the city for $600,000 in severance and sick days. >> from this small community, to have it reveals, he's fired and comes back for severance, it's

incredible, outrageous. >> but seeking severance isn't apparently more. randy adams wants more money from the state of california for his pension. he's also suing the state to double his pension to half a million dollars a year for the rest of his life. how? his oversized salary in bell. that was his last job. his highest paying job. even though he only held the position for a year, he said his pension should be based on that pay. >> hi, i'm from cnn. we caught up with randy adams. this people of bell say you milked them for a salary that was extraordinarily high and now you're trying to do the same thing to the state. >> i disagree, of course, with those types of characterizations, and when one day i'm able to tell my complete side of the story, i think you'll see there is a completely different side to that story. unfo

unfortunately i can't talk at length about it, but that's the situation. >> do you think you deserve to make debl what the -- >> i have made all the comments i can make at this time. >> i did manage to speak to his attorney by telephone who says that adams is a good cop, a life-long public servant who does deserve to double his pension to $500,000 a year for that one year service in bell, but the people who run california's pension system say absolutely not. what is he asking for? >> basically, he's trying to double his pension from $19,000 a month which is far surpassing almost anyone else in our system as a retiree to about $38,000 a month. >> does he deserve $38,000 a month from the taxpayers? >> the pax payers are outraged whenever anyone does anything like use fraud and deceit and hide the way in which you were paid. >> a proposed position agrees, rejecting his appeal to increase

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thousands of sandy victims on new york's devastated long island are hit with power bills even though they were in the dark for weeks. let's bring in mary snow.

what are you seeing? >> there was already a lot of anger toward the utility that provides power to new york's long island because of its response after the storm. that anger is only escalating when customers started getting their regular monthly bills. >> basically, this entire thing was full of water up to about here. >> jonathan experienced the wrath of sandy firsthand when the superstorm destroyed his long beach restaurant, but it's now his wrath that's all consuming, targeted at the long island power authority. they're coming under intense criticism for its response following the storm. the latest criticism, lipa is sinding out full monthly bills even though thousands of people had no power for weeks after sandy. >> at first it was exasperation, then frustration, and now it's a pure hatred. >> in his case, he received a bill for a home he said he vac ated on october 1st and then

came a bill for his new home, even though he had nopower for 14 days. on top of that, he expects the electric bill for his restaurant to be around $1,700. a lipa spokesman said a company representative wasn't available for an interview on camera, but they said lipa was told by their contractor, national grid, that their computer system cannot reduce the estimated bill to a period of time shorter than a whole billing period. lipa said they're giving their customers options. among them, they can wait until the meter is read to pay. make a partial payment with no penalty, or it says customers can read the meter theelves and get a corrected bill. the utility also said it's aiming to withhold bills to some heart hit areas like the rockaways. >> it's a poor way of making nice for a colossal mistake. money is not as readily

available to people as it was prior to the storm. and to think that, you know, it's okay that it's going to take one billing cycle, two billing cycles to balance itself out, it's insane. >> even with so much anger directed at lipa, the head of a crisis management firm said utilities with no competition have little incentive to change. >> what usually happens in situations like this is in order to show that something has been done, heads roll, people are fired, but the company remains in tact, largely because there's not a lot of other options for consumers or local governments. >> now, on monday, the utility announced two resignations. one of them is the vice president of customer service. lipa's coo has also said he's stepping down at the end of the year. and in the wake of the storm, new york's governor ordered a special commission to investigate the response of new york's utilities. wolf? >> mary snow, thank you.

and you're in "the situation room." happening now, an effort to placate critics throws fuel on the fire. ambassador susan rice goes face-to-face with republican lawmakers. yasser arafat's body is exhumed. was israel involved in his death? i'll ask. plus, the woman at the center of the general david petraeus sex scandal. we're learning how paula broadwell reacted when the former cia director revealed their affair to the entire world. i'm wolf blitzer. you're in "the situation room." a hot spotlight on susan rice on capitol hill to meet with some of her sharpest republican critics. they accuse the u.s. ambassador to the united nations about

misleading americans about the deadly attack on the consulate in benghazi, libya, and some have threatened to block her possible nomination as secretary of state. if she was hoping to placate her critics, the meeting clearly had the opposite effect. dana bash was watching this unfold. what are her critics saying after the big meeting with ambassador rice? >> those three senators who vowed to block her nomination if she is nominated to be secretary of state, really didn't soften their rhetoric in the days leading up to today's meeting. the reason, i'm told, is they wanted to do it as a courtesy. they knew they would have a face-to-face rr meeting, let her answer the questions, but they came out with even harsher and harder rhetoric against rice. the way these grim-faced gop senators tell it, susan rice's attempt to calm their criticism backfired. >> we are significantly troubled by many of the answers that we

got and some that we didn't get. >> i'm more disturbed now than i was before. >> the information given to the american people was wrong. in fact, ambassador rice said absolutely it was wrong. >> rice requested to meet with her chief republican critics in order to explain why five days after the benghazi attack that killed four americans, she wement on a talk show suggesting it was sparked by a protest. rice explained she was using these unclassified talking points which were stripped of references to al qaeda. so rice used the word extremist. >> extremist elements came to the consulate as this was unfolding. >> a source inside the meeting tells cnn rice admitted to gop senators she was aware of classified information suggesting al qaeda was behind the attack, and yet gop senators point out, she still said this publicly.

>> we have decimated al qaeda. >> cnn is also told rice tried to clarify to gop senators is what she meant is al qaeda's core leadership has been decimated. gop leaders say it's proof she was putting pre-election spin before national security. >> it was unjustified to give the scenario as presented by ambassador rice and president obama. three weeks before an election. >> ambassador rice, what do you say to republicans who say your comments were politically motivated? >> rice did not answer our question. she did release a statement admitting her talking points were, quote, incorrect in a ski respect. there was no protest or demonstration in benghazi. while we certainly wished we had had perfect information just days after the terrorist attack, as is often the case, the intelligence assessment was involved. we stressed that neither i nor anyone else in the administration intended to mislead the american people at

any stage in the process. the white house had this to say. >> the focus on some might say obsession on, comments made on sunday shows seems to me and to many to be misplaced. >> gop senators also complained rice neglected to ask key questions before telling the public what turned out to be wrong information. >> that's troubling to me as well. why she wouldn't have asked. i'm the person who doesn't know anything about this. i'm going on every single show. >> and wolf, just moments ago, the senate majority leader harry reid released a statement, very, very direct and pretty critical of those republican senators who were critical of susan rice. really defending susan rice, and he was talking about the republican senators saying the election is over. it's time to drop these partisan political games and focus on the real challenges facing the nation. he said that these attacks on susan rice are unfounded and they don't jive with reality. i can tell you that senator joe

lieberman who is the chairman of the homeland security committee came out of a separate meeting with rice and said he he found her answers satisfying and he would vote for her for secretary of state if he was voting. >> thanks very much, dana bash. with that looming on capitol hill, the looming battle over the so-called fiscal cliff. >> there's a lot going on. a lot of battles going on. specifically on capitol hill, that's for sure. lawmakers have just 35 days to reach a debt reduction deal. otherwise, huge spending cuts and steep tax hikes will automatically take effect and affect almost every american. ahead of that battle, some lawmakers are rethinking long-held stances but others are standing firm. most of the focus has been on taxes which still is a key element, do not forget that. another part of the fiscal cliff deal will likely be entitlement. that could mean trouble for the

president with his own party. not now, that's the message from the number two democrat in the senate on entitlement reform. illinois senator dick durbin now arguing talk of cuts to massive programs like medicare and medicaid should not be part of a plan to avertthe fiscal cliff. a position that appears as odds with other democratic leaders. most notably, president obama. >> i believe that we have to continue to take a serious look at how we reform our intitlements because health care costs continue to be the biggest driver of our deficits. >> this spokesman reiterated that stance tuesday. >> when we're talking about a broad balanced approach to dealing with our fiscal challenges, that includes dealing with entitlements. >> an aide to durbin said the senator does not believe his position conflicts with the president's. rather he's making a clearer distinction between the short-term challenge of the

fiscal cliff and the long-term problem of reducing the deficit, but any fiscal cliff offer without entitlement reform is widely seen as a non-starter with republicans. >> the reason we're having these negotiations is because washington democrats have spent money without any care for the cost or the future. and refused to do anything to protect long-term spending programs like medicare. a failure that is among the biggest single drivers of our debt. >> entitlement programs have long been champions by democratic lawmakers and any changes will likely face a fight from liberal members of the president's party. >> the moment that republicans want to talk about privatizing social security or voucherizing medicare, that's the moment that they will find not just resistance but a fight from democrats. >> so we asked senate majority leader harry reid about durbin's comments. should entitlements not be on the table? >> we hope they can agree to the

tax revenue that we're talking about, and that is rate increases, and that as the president said on a number of occasions, we'll be happy to deal with entitlements. >> a little coy with the answer. no progress on the talks going on for more than a week and still no progress with the principals who are the key negotiators. senator reid said he's disappointed with how negotiations have gone. >> they don't have a lot of time. let's dig deeper. gloria borger is here. is it at all realistic there could be a deal without major entitlement cuts, reforms, whatever? >> no, i think they're all going to have to blink at the same time and do the tax part of the deal and do the entitlement part of the deal. you know, automatic entitlement spending is about 62% of the federal budget. how can you cut a big deficit reduction deal without looking at entitlement spending? when you go back to the grand bargain that didn't happen

during the debt ceiling negotiations, they were almost at that finish line and the president at that point did sign on to entitlement changes in medicare and social security. so in talking to some senate republicans today, you know, they suggest that a couple of things we all know are on the table, which is changing the way we compute social security benefits, which is a solution that was proposed back in the '80s, for example. also gradually raising the retirement age. for medicare, very gradually, something that should be on the table that republicans want to see. and again, you know, who goes first? that's the big question. >> going together. i like that concept. let's get them in the room and make them blink at the same time. a lot of that is a messaging board, if you will, and how they're handling the public relations and their public

statements and what they're telling their constituents. >> from one campaign to another campaign. and there hasn't been a minute. what they're doing is they're gathering their constituencies and saying we're still on your team. we're leading you. so the president meets with ceos. republicans meet with ceos. the president meets with small businesses, republicans meet with small businesses. president is going to go out on the trail on friday. i guarantee you republicans are going to talk about this on the trail. look at this. we asked people what they want in their budget plan, and you see that 67% of the people want a mix, which makes an awful lot of sense, spending cuts and tax increases. and that's the only mandate that i see in this deal coming out of this election, which is fix it, get it done, and make it fair and balanced. >> and don't go over the cliff. >> something is going to change regardless. >> merry christmas. we'll be here. >> appreciate it very much. we're also learning new

information about the two women at the center of the david petraeus sex scandal including why his former mistress paula broadwell is still in shock. you'll find out what she didn't expect will happen. plus, a prominent journalist nearly assassinated for his coverage of this girl shot by the taliban. he shares his chilling story with us. that's coming up. [ female announcer ] dermatologist recommended aveeno has an oat formula, now proven to build a moisture reserve, so skin can replenish itself. that's healthy skin for life. only from aveeno. bp has paid overthe people of bp twenty-threeitment to the gulf. billion dollars so skin can replenish itself. to help those affected and to cover cleanup costs. today, the beaches and gulf are open, and many areas are reporting their best tourism seasons in years. and bp's also committed to america. we support nearly 250,000 jobs and invest more here than anywhere else. we're working to fuel america for generations to come. our commitment has never been stronger.

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this coming in to cnn right now. new information about one of the women in the scandal surrounding general david petraeus. >> jill kelley triggered the investigation that blew the affair wide open. joe johns has new information on ce celley, and susan has more information on his former mistress, paula broadwell. what are you hearing about kelley. >> a source close to jill kelley indicates she and her legal team

are launching a full court press to defend her hereputation, whi they say has been severely damaged since the petraeus scandal went punlic. we also have new pictures of jill kelley of her with her family, released by sources close to her to try to repair her image. they're alleging government sources are responsible for the leak to the media about her personal life, starting with her name, a letter from kelley's lawyer asked whether the department of justice is investigating the alleged leaks and what her attorney refers to as potential violations of the privacy act. lowell said in the letter he's looking at the situation to see if there's action to take. we haven't heard back from them, and also haven't heard back from the department of justice here in washington. other paper s obtained by cnn

indicate lowell and his colleagues are filing a suit against a woman and the legal team has sent a third letter to a former business associate of ke kelley's warning some of his public statements may constitution defamation. >> much more information to come on all of this, then. >> absolutely. >> we have new information about paula broadwell as well. >> new images seen for the first time in "the situation room." they're images that don't fit so far. her friends and family are putting them out there in order to balance what they call a negative and narrow portrayal of her. take a look. these are not images in the shorter dresses, tight fitting, high heels. not the ones on the covers of magazines or headlining blogs. these are images her family wants out there that they say show who she really is. this one taken on a family vacation with her husband and two sons. that's the take away they're hoping people will get, that

she's more than petraeus' miserous. she's a mother, a wife who made a mistake. similar to what petraeus has said about his own role in this. friends of broadwell said she's still somewhat in shock over the news of her affair being thrust into the public spotlight in the way it was and she's been spending time working on repairing the trust issues with her husband. that's according to her brother. she's also remaining out of the public eye while the fbi continues its investigation into classified materials and friends say they're fed up with the portrayals of her. they want people to know she's a person who made a mistake. she's also hired a d.c. public relations firm to help her on that end. they're interested also in people knowing she's a mother, wife, sister, friend. the label mistress isn't all-encompassing. difficult in a situation like this where people don't know anything about you until they find out. >> they have all hired lawyers and pr firms.

petraeus, paula broadwell, jill kelley, trying to fix their images. >> and the investigation is still under way. thank you both very much. still ahead, we have seen it a million times, the president getting on a helicopter, marine one. now this picture you're looking at, could all change. i'm done! "are you a cool mom?" i'm gonna find out. [ female announcer ] swiffer wetjet's pads are better than ever. now they have the scrubbing power of mr. clean magic eraser

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senator and 1996 republican presidential nominee bob dole is back in the hospital, but apparently not for long. what else is going on? >> an update on senator dole's condition. an aide tells cnn he checked himself into walter reed and will be discharged tomorrow.

the aide says also dole is doing very well. on the senate floor today, majority leader harry reid wreet to his one-time colleague urging a yes vote tomorrow on a treaty guaranteeing rank to people with disabilities. they're more than happy to oblige. >> one of the prime individuals that was largely responsible was our beloved leader at that time, bob dole. a man who epitomized in my view how a disability can be overcome and go to the highest levels of american government. i freely admit that i love bob dole, i listen to him. i appreciate his leadership. i think the majority leader would agree that we appreciate his bipartisanship during a great deal of his team. >> senator mccain is absolutely right. those of us who served with bob dole revere bob dole.

he's such a stalwart figure in the history of america. he had all the qualities of a leader that i admire and certainly wish i had. he had a great sense of humor. no one that's ever served in the senate has ever had a better, quicker sense of humor than bob dole. he used it to perfection. >> former senator dole lost the use of one of his arms when he was wounded during world war ii. >> and the u.s. navvy wants to replace the aging fleet of marine one helicopters. the navy plans to buy 25 new helicopters used to transport the president. that's a draft request. the first of the helicopters would be ready in 2020. in illinois, an election up in the air, and decided by a coin toss. right there, the candidates for dewitt county board seat were tied at 827 votes each. so the county clerk tossed a

quarter and heads gave the election to the challenger, although he was pleased with the outcome, he said he considered the coin toss gambling, of which he does not approve. think about if we decided the presidential election that way. >> maybe they can decide the fiscal cliff with that. >> might have a better outcome. >> here's a question, was yasser arafat poisoned. if so, did israel have anything to sdoo with it. we're going to talk about with the israeli government spokesman in jewelry. [ male announcer ] red lobster's crabfest ends soon. hurry in and try five succulent entrees, like our tender snow crab paired with savory garlic shrimp. just $12.99. come into red lobster and sea food differently. and introducing 7 lunch choices for just $7.99.

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overturn his decision. >> and they capture the aftermath of shelling in homs. they can't verify its authenticity. opposition groups say at least 82 people died today in the sichb civil war violence. >> we're also following the situation in gaza and israel where a six day old cease-fire ended nearly a week of fighting. the world is watching to see if it will last. joining us now from jerusalem, mark regia. we have a lot of issues to go through. but let's start with the cease-fire between israel and hamas. is it holding? >> we have had one or two unfortunate incidents, but the good news is as a whole, the quiet is holding. that's good, first and foremost, for the people of southern israel who don't have to live in fear of an incoming rocket from gaza. south of my country has returned to normal and that's what that's all about.

>> looking back on the negotiations that led to the cease-fire, what was your assessment, the prime minister's assessment of the u.s. role, specifically the role president obama and secretary of state hillary clinton played? >> we were full of praise for the american role. we thought the americans were instrumental in working with egypt and others to make sure that their cease-fire would come into place and that the cease-fire would have legs, it would have longevity, and ultimately, the fact that hamas promised egypt to keep the quiet, that's an important promise. that combined with israeli deterants we'll hope will keep a long period of quiet for the people who deserve to live without fear of an incoming rocket. >> you heard the rumors that part of the deal, more u.s. troops would be sent to sinai. there are about 700 u.s. troops there. what can you tell us about that?

>> i'm not aware specifically of that issue, and i apologize. i can say the following. one of the major challenges to this cease-fire is the whole issue of rearming hamas. and it's important that we prevent iran, which will try to send more rockets to hamas, and that's like, you know, that's giving very dangerous material to hamas. they're a more dangerous hamas, a hamas that is more likely to shoot rockets into israel. it's important we stop the iranian rockets from reaching hamas. we think there should be a global effort to keep that from happening. not just in sinai, but beyond. the distance to gaza is long and interception can happen all along that supply route. >> there's about to be a vote in the united nations general assembly granted the palestinians a greater form of independent statehood, if you will. i want you to listen to what the palestinian representative to the united nations said. >> i think that the great majority of nations will vote

with us. we are doing it this way. it is not illegal. it is not unilateral such as all illegal things that israel does as an occupying power against our people. >> well, it looks like they're going to have a significant majority in the general assembly. france now says it will support the palestinian resolution, and other european countries will as well. what practical impact will this have? >> this is a mistake by the palestinians. i think this is political theater at the united nations where they have an automatic majority. they can get whatever they want through the united nations general assembly. they don't have a problem. they have the numbers. the arab vote, the muslim countries are the countries that automatically support them. the bad news is it doesn't change anything whatsoever on the ground. it doesn't bring peace closer. it doesn't bring the eventual creation of a palestinian state closer. in fact, it serves to undermine

the process of negotiation. it dissipates what little confidence is left. what the palestinians should be doing instead of going to the u.n. and playing political theater, they should be negotiating. that's the only way to solve the difficult issues that separate israelis from palestinians. we call for direct negotiations. there are very difficult issues on the table. you know that it won't be easy to solve the problems. but the only way to do so is through talking through dialogue. i asked the palestinian leaders, you say you want peace. who do you expect to make peace with if you refuse to talk to israel? who do you expect to make peace with if you're boycotting the negotiating table? we have been calling consistently for the resumption of pieeace talks. instead of picking up the ball, the palestinian leadership is playing political theater at the united nations and nothing is going to come from this except maybe a piece of paper that won't change anything on the

ground and a bit of political theater. >> you saw the report today that the body of yasser arafat was exhumed. they're investigating whether or not he was poisoned, murdered. what can you say as a spokesman for the government of israel. did israel have anything to do with the death of yasser arafat? >> unequivocally no. those charges are ludicrous, and it's, you know, conspiracy theories when you know sometimes have legs of their own, but there's no truth in it whatsoever. >> none whatsoever, is that what you're saying? >> correct. >> are you cooperating with this investigation? >> we haven't been asked to cooperate. this is a palestinian issue, nothing to do with us. all of the medical documents, that's on the palestinian side. once again, we had nothing to do with it. >> did the prime minister release a public reaction to the sudden decision by the defense minister ehud barak to retire

from politics in january? >> yes, he did. he spoke about it yesterday. prime minister netanyahu and minister barak go back a long way. they were in the special forces together. my prime minister said he spent more time with barak in combat fatigues than in suits and ties as politicians. they go back decades. my prime minister praised the contribution to israel's security and defense. and he has enjoyed having him by his side. >> mark regev is a spokesman for the prime minister. thanks very much for joining us. >> my pleasure. a prominent journalist narrowly escapes an assassination attempt by the taliban. he tells me about his very close call. that's next. because your daugy wants that pink castle thing. and you really don't want to pay more than you have to.

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her story has been reported around the world. malala the teenager shot by the taliban for advocating education for girls. but for one pakistani journalist, the story almost cost him his life. the taliban tried to assassinate him with a car bomb. joining us now from islamabad, one of pakistan's most prominent journalists, the executive etter of geo tv. i'm glad to see you. i'm glad you survived this assassination attempt. how did you discover this bomb that was under your car? >> that was only good luck because the driver of my

neighbor, he saw a bomb which was installed under my car with a magnet. and he warned my driver that there is something under your car, please check it. and my driver checked it, and he was suspicious because it was a bag. then he informed me. i was preparing myself to go to the office, and i was already informed by the home department and some security groups and also from the police that i am under a threat and i should be careful. so that's why i informed the bomb disposal squad. and after 30, 35 minutes, they defused the bomb. >> the taliban claimed responsibility for wanting to kill you because of the coverage of the young pakistani school

girl, mulall malal ark. they said we have adviced journalists to be moderate. if they don't understand our advice, we send explosives or bombs. what is your response to that taliban spokesman? >> wolf, look, that taliban spokesperson, he sent me a six-page letter two weeks back. and he warned me that i should not support mulallmalala, and a receiving his letter, i spoke on my tv show i will not accept your decision and i will continue my support for malala. and then he sent me a message through one of my colleagues that we will send some suicide bombers. today, the same colleague of mine, he was contacted again by

the taliban spokesperson, and he told me the same message, that this time you survived, but next time, you will not survive. and they want me to -- they warned me i should not support malala. i should not say that attacking malala was a bad thing. so i cannot surrender to the taliban. they warn i should not speak against them. if i stop, it's a surrender to taliban. i cannot surrender to taliban. i will keep supporting malala. the little girl called me from the hospital last night and spoke with me for more than ten minutes, and she was giving me a lot of strength. so if she is stand against the taliban and she's a little girl, 14-year-old girl, so i should also stand against taliban. the people of pakistan give me so much respect and popularity. this is a testing time for me, and i should stand by the people of pakistan who face terrorist

attacks every day and most of my colleague colleagues in travel areas, they're more vulnerable than me. they're getting more threats than me from taliban and from the security forces. i'm sitting in the capital, yes. i am also vulnerable, but i should not surrending to the taliban, and i will not. today, just a few hours back, i spoke on my show and i reported back to the taliban spokesperson that you think that you can terrorize me, i will not stop. and i will keep opposing you. >> are you suggesting that pakistani security services, in addition to the taliban, may also have played a role in this assassination attempt against you? >> wolf, it's a very complicated situation.

if nine months ago, the committee to protect journalists in new york and some other media outfits, they issued a statement and i also endorsed the statement that i was getting threats from some security officials. and at that time, the government established a committee to investigate those threats, but no report was released. they never came out with complete results. there was no -- no report of their investigation. i cannot make a judgment right now, and i will leave it to the investigation authorities. yes, taliban have threatened me in the recent past and they threatened me a few months back. i am scared of both of them, but i will not leave pakistan. i will not stop speaking the truth. >> good luck to you. be careful over there.

we know the important work that you're doing, and we wish you only the best. we of course wish only the best for all pakistanis in the process. thank you so much for what you're doing. >> thank you very much. >> really a good journalist. i met him when i was in islamabad in 1999 for the first time he was on my show. whenever a journalist is threatened around the world, it hits all of us who are professional journalists. i'm on the advisory board of the committee for reporters freedom which tries to protect journalists all over the world. it's an important subject for those of us, especially those of us who work in this business. >> and for everyone watching the story. malala's story is a story that caught on all across the world. all she's trying to do is promote education for kids. great story, wolf. so glad you did that interview. still ahead, hundreds of thousands of homes were torn

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being inundated with claims in the wake of the superstorm sandy. >> but a surprising number of the claims are being denied. in some cases, wrongfully leaving homeowners shocked and angry. >> i had all new furniture. >> reporter: when superstorm sandy hit brooklyn, peggy thought she was ready. she had paid decades worth of insurance premiums to be covered for catastrophe. this is a letter basically denying --

>> i went to the office and this is what they gave me. >> reporter: she says her claim was denied. her deluxe homeowners policy covered wind, not flood. >> you don't have flood insurance. >> reporter: down the block, tom sullivan was having a similar problem with a different insurance company. >> the water was coming out of the tubs, out of the toilet. >> reporter: after initially being told he would get $10,000 for sewer backup, he was then told no because his damage was caused by the storm surge. when you agreed to the policy was it your understanding if i pay you and my home suffers damages, you will make it right and cover? >> that would be the understanding with anyone. otherwise, why pay? >> reporter: more than a dozen people we spoke with in hard-hit areas were equally upset. how many of you are less than happy with the experience of your insurance company. >> all of us.

>> reporter: insurance critics call the push-back delay, deny, defend. >> the worst is to say we're not going to pay for this when in fact it's covered or low balling, saying we're only going to give you 50 kenlts cents on dollar. >> reporter: what the dollar. >> a number of these insurance companies are finding ways to say no before they're saying yes. >> i would disagree, there are a small number of disputes that do occur when you do have as many as a million claims, yes they do. >> robert speaks for the insurance industry. he could not talk about the denied claims. instead, saying payment of sandy-related claims is going very well. >> people are paid the amount of money that they are entitled to under the terms and conditions of the policy. yes. . >> and that may be a big part of the problem. many people don't understand the terms and conditions of their policies until after they need them. >> reporter: what does this mean? we may not limit our liability to pay damages for which we

become legally liable to pay? >> i don't know. i don't know. >> reporter: because some people will say, look, it's your responsibility to understand this. >> but what does that mean? >> reporter: arguably some insurance companies may count on exactly that. the state's chief insurance regulator is tracking insurance companies who fail to do the right thing. >> if it ends up that there's a pattern where particular companies are not paying what they promise to pay, they are going to have a huge problem doing business in this state. >> reporter: so what happened? both peggy taylor and tom sullivan got intervention. peggy from new york state's financial services which called her insurance company. after surveying the damage, an adjuster gave her a check for $7,500, a partial payout for hurricane and wind damage, though, not floods. as for tom sullivan, after we called his insurance company, they reviewed his claim and promised him a check for $10,000, then contacted us to find out whether sullivan's

story would be included now that the matter was resolved. cnn, new york. >> neither taylor nor sullivan had flood insurance because they live in an area that was never expected to flood and many others in the disaster zone are in the very same situation. >> let's get back to one of our big stories tonight. the fiscal cliff negotiations. erin burnett is going outfront on this story with one of the key senators of the talks. what's going on? >> mark warner of virginia, one of the wealthiest men in congress and a democrat, of course, wolf, he's been working on this for years and he's frustrated tonight. harry reid said he's frustrated a deal isn't close, the market fell. the implications here are serious. senator warner comes outfront to talk about what he's will go to do on tax rates and has an interesting idea on that. and we're going to talk about the definition of motherhood. a woman and her best friend decided to have a child together, his sperm and a donor egg. and after she gave birth to the

child he said i'm gay, i'm the biological father, i want the child. what happened? a judge has just ruled on this. a pretty fascinating definition of what a mother really is. that story also at the top of the hour. back to you. >> look forward to the show, erin, thank you. up next here, christmas carols with a touch tone twist. on the new way to sing holiday favorites. ♪ list of almost two thousand corporate partners - companies like microsoft, american red cross and adobe - to create options for you. not only that, we're using what we learn from these partners to shape our curriculum. so that when you find the job you want you'll be a perfect fit. let's get to work. and with my bankamericard cash rewards credit card, i love 'em even more. i earn 1% cash back everywhere, every time. 2% on groceries. 3% on gas. automatically.

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112 cubic feet, big enough for 146 bags of groceries or flat screen tvs or maybe a few pairs of shoes. i would love to fill that with shoes. >> some people have way too much free time. now that thanksgiving has come and gone and it isn't even december yet, your favorite radio station may have switched over to some holiday music. everybody certainly has a favorite, so m neme new, some o jeannie moos has found a new take on a classic poised to go viral. >> reporter: it's one of those omnipresent christmas songs you hear. ♪ played on cellos, performed by vocalists. but now the ding dong is coming out of the office phone. ♪ >> the day of, there was over 250 takes.

>> it wasn't like you dubbed over sounds. >> no, no, all the sounds are real. >> reporter: produced at the warehouse where alphabet photography assembles their products in niagara falls, canada. ♪ owner jennifer blakely used a mix of her employees and local musicians to create a do-it-yourself version of "the carol of the bells." >> he's also a local rapper. >> reporter: the guy manning the phone like some demonic elf -- >> demonic? >> reporter: is a singer/song writer. >> i got excited. >> reporter: alphabet photography is a small company, and unlike walmart -- unlike the nba. jennifer can't afford a big ad budget, so this is a sort of

viral christmas commercial. two years ago she organized a christmas flash mob in a mall food court. that video now has 39 million views. the new video starts with dial tone. imagine all those folks at home who are going to be dialing 9591. take it from the demonic dialer. >> if people are trying to play it, know that not all telephones are in the same key. >> my producer found a better combo. >> pound, eight, pound, four. >> listen to this. >> reporter: it will either sweep you off your feet or leave you wishing for dial tone. jeannie moos, cnn. what's the beethoven one? >> oh. five, five, five seven. >> new york. >> very cool.